James Pethokoukis

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Perhaps Congress should set the rules so that any state applying for a federal bailout will get treated like the District of Columbia. Since they seem keen on surrendering their sovereign status, they can have non-voting delegations to the House and Senate until they repay whatever federal dollars they take to cover their shortfall. Considering the vast majority of California’s elected representatives on Capitol Hiill, that would be in practical terms a net plus for Congress, although an egregious violation of the Constitution. (Yes, I’m being glib.)

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The willingness of this Chinese company to purchase Hummer serves as a stark reminder of what could have been. Had George W. Bush not allocated TARP money to GM last December, in circumvention of Congress’s rejection of a bailout, then GM likely would have filed for bankruptcy on January 1. At that point, there would likely have been plenty of offers from foreign and domestic concerns for individual assets to spin off or for equity stakes in the New GM. There would have been plant closures, dealership terminations, and jobs losses, as there is under the nationalization plan anyway. But taxpayers wouldn’t be on the hook for $50+ billion, a sum that is much more likely to grow larger than it is to be repaid. It is also a sum that will serve as the rationalization for further government interventions on GM’s behalf.

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Certainly most of the free market/conservative/libertarian types I chat with are in a tizzy about the General Motors bankruptcy — or, to put it more accurately, the 60 percent government ownership of GM once it emerges from its quickie bankruptcy. Government Motors. But is there a free market case for the Obama auto bailout? Here is what I was able to gin up: